NSLC Business & Entrepreneurship · University of Michigan
The Edge Setting Your Idea Apart
Lecture 2 · Professor Danny Ellis
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Before anything else…
🎤 Danny's story — to fill in
The cold open: the day competition got real for SkySpecs.
Candidates: the moment you discovered a competitor had beaten you to something — a feature, a customer, a press release
Or: a deal you won head-to-head against a bigger, better-funded rival — what the customer said when choosing you
Set the stakes ("we could not afford to lose this one") and stop before the resolution
Cliffhanger: “…how we won that one is exactly what today is about.”
🖼️IMAGE SLOTPhoto from the story moment — the competitor's product/press hit, the customer site, or your team mid-scramble
Where we are
You have an idea. Today we make it unbeatable.
Last time: mindset → plan → idea → industry → research. You left Breakout 1 with one sentence — “We help [who] solve [what].” Today, six moves to give it an edge:
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1 · Competition
Know who you're up against
🧭
2 · SWOT
Map your position honestly
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3 · Advantage
Find what puts you ahead
💎
4 · Value Prop
Say why you win, in one line
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5 · Target Market
Pick who buys first
📣
6 · Marketing Plan
Make them find you
Rubric alert: these six are the Competitive Analysis, UVP, Target Market, and Marketing Plan lines on the judges' sheet Friday. Today is worth points.
Move 1 · Competition
Competition is a good sign
Businesses compete for customers in a market: a potential group of customers — people or businesses — who are willing and able to purchase a particular product or service.
Willing and able. A broke superfan isn't a market. A rich person who doesn't care isn't either.
💵
Competitors exist?
Someone is already getting paid to solve this problem. Competition is proof money exists.
🚨
“We have no competition”
Judges hear: either you haven't looked — or nobody wants this. Both are bad. Say who you beat and how.
Competition · Interactive
Two types of competition — click a matchup, then its bucket
🥊
Direct
Sells a similar product or service. Coca-Cola vs. Pepsi. McDonald's vs. Burger King.
🥷
Indirect
Different product, same customer need. Coca-Cola vs. Starbucks. McDonald's vs. KFC.
🥊 Direct
Similar product, fighting for the same purchase
🥷 Indirect
Different product, same underlying need
Competition · Case study
Who was SkySpecs really competing against?
🎤 Danny's story — to fill in
Map SkySpecs' real battlefield: direct AND indirect.
Direct: the other drone-inspection companies — who they were, how you tracked them, what you obsessed over (and what you ignored)
Indirect — the big one: rope-access human inspection teams. Not a startup. The incumbent way of doing things — and your biggest competitor for years
The pitch you actually had to win: not “we're better than other drones,” but “we're better than the way you already do it”
Lesson to land: “doing nothing / doing it the old way” is on every customer's shortlist
🖼️IMAGE SLOTRope-access technician hanging off a turbine blade vs. your drone doing the same job — the contrast IS the slide
Move 2 · SWOT · Interactive
SWOT analysis — click each quadrant
💪 Strengths · internal / positive
What your business does well, from the inside: skills, assets, advantages you control.
Campus snack delivery: we live in the dorms — 10-minute delivery nobody off-campus can match; zero rent.
🩹 Weaknesses · internal / negative
What holds you back, from the inside: gaps in skills, money, time, experience.
Campus snack delivery: two founders with classes at peak snack hours; no cash for inventory.
🚪 Opportunities · external / positive
Outside forces you can ride: trends, new rules, gaps competitors left open.
Campus snack delivery: the dining hall now closes at 8pm; finals week is coming.
⛈️ Threats · external / negative
Outside forces that can hurt you: new competitors, rule changes, shifting tastes.
e.g., better-funded competitors, regulation reversing, big incumbents deciding to build it themselves
Move 3 · Competitive Advantage · Interactive
Your edge, on a grid — click cells to fill it in
Competitive advantage = something that puts your business ahead of the competition. A differentiator = the unique characteristic that distinguishes you from other businesses. A competitive matrix is how you find both: compare your characteristics with your direct competitors', factor by factor.
🫵 You
Competitor A
Competitor B
Price
—
—
—
Quality
—
—
—
Speed / delivery
—
—
—
Customer service
—
—
—
Unique feature
—
—
—
Click to cycle: ✓ has it · ★ best in market · ✗ doesn't have it. A column of ✓s with one ★ nobody else has? That ★ is your differentiator.
Competitive Advantage · Interactive
Ten classic sources of an edge — flip them. Which two are yours?
📍Location
You're where the customer is and rivals aren't. The food truck outside the stadium.
🧠Specialty knowledge
You know something competitors don't — and it shows in the product.
🥇Quality
Measurably better materials, craft, or results. Not "we care more" — provably better.
⭐Reputation
Reviews, word of mouth, a name people trust. Slow to build, brutal to lose.
🤝Customer service
You answer faster, fix it kinder, remember their name. Service is a product feature.
🦄Unique factors
Something structurally hard to copy — a patent, an exclusive deal, a secret recipe.
🎛️Customization
Made-for-you beats one-size-fits-all. Customers pay extra for "exactly mine."
🔬Specialization
Do one thing for one kind of customer, better than any generalist can.
🚚Delivery method
HOW it reaches the customer: faster, cheaper, cooler. Domino's tracker. Drone vs. rope.
🏷️Price
Cheapest wins some markets — but it's the easiest edge to copy. Dangerous as your ONLY edge.
Move 4 · Value to Customers
Value is decided by the customer — not by you
Human-centered design: put the customer at the center of everything and work outward. Before you claim value, answer:
📖 What is your customer's story?
🧱 What problems do they face?
🔥 What are their pain points — the parts that actually hurt?
🛠️ What solution does your business hand them?
Value proposition = a short statement summarizing all the benefits a company gives its customers.
Value Proposition = Benefits − Costs
“Costs” isn't just price — it's time, hassle, risk, and switching pain. Shrink those and value grows without touching the price tag.
Deeper dive · Value proposition
Benefits − Costs, at 300 feet
🎤 Danny's story — to fill in
How SkySpecs framed its value proposition to wind farm operators.
The benefits stack vs. rope teams: safety (nobody hanging off a blade), speed (minutes vs. hours per turbine), cost, data quality
The costs the customer weighed: new-tech risk, trusting a startup, changing a process that "already works"
How the pitch evolved — what you led with early vs. what actually closed deals
Land the formula: name which single benefit outweighed all the costs
🎬VIDEO SLOT30–60s inspection footage or the before/after pitch slide you actually used with operators
Move 5 · Target Market
“Everyone” is not a target market
Your target market: the specific group of consumers most likely to buy — defined by shared traits. Your ideal customer, described precisely enough to find them.
Aim at everyone and you hit no one. Aim at a specific someone and the message, the channel, and the product all get easier to choose.
Four lenses on your ideal customer — flip each one
🪪Demographics
The objective social & economic facts: age, income, occupation, education, family size.
💭Psychographics
What's in their head: attitudes, opinions, beliefs, interests, personality, lifestyle.
🗺️Geographics
Where consumers live — or where the businesses you sell to are located.
🛒Buying patterns
How people or businesses actually buy: impulse vs. research, online vs. in person, how often, who decides.
Deeper dive · Interactive
Build your ideal customer — click the chips
🪪 Age range
🗺️ Location
💭 Interests
🛒 Buying style
👤
Your customer persona
Age range?
Location?
Top interest?
Buying style?
Pick one chip in each group and I'll write the persona sentence for you.
Move 6 · The Marketing Plan
Marketing = how you present your business to customers
Three jobs: create awareness, attract customers, and convince them to buy. A marketing plan = your goals + the strategies (your promotional mix) to hit them.
🏃
Short-range
Up to 1 year. Launch, first customers, first proof. This is your Friday pitch.
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Mid-range
2–5 years. Growing share, new products, repeat customers.
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Long-range
10–20 years. The empire: new markets, the brand everyone knows.
The Marketing Plan · Interactive
Goals only count if they're SMART
🎯
S · Specific
One clear outcome — not "do better"
📏
M · Measurable
A number you can check
🪜
A · Achievable
Hard but doable with what you have
🧲
R · Relevant
Actually moves the business
⏰
T · Timely
Has a deadline
🔬 The SMART checker — click a goal, watch it score
SMART
Click a goal on the left to grade it.
The Marketing Plan · Interactive
The 4 Ps — flip each card. Your promotional mix lives here.
📦Product
What you offer and its key benefits — the thing plus the value it delivers.
🏷️Price
What customers pay — and what that number says about you. Cheap signals different things than premium.
🏪Place
Selling & delivery methods — your sales channels. Online, in person, in stores, on campus: where the buying happens.
📣Promotion
The strategies that make customers aware you exist — ads, social, word of mouth, giveaways.
The 4 Ps have to agree with each other. A luxury product with a discount price in a gas station with no promotion? That's four answers fighting.
Promotion · Interactive
Old school or social? Sort the promotion strategies.
📻 Traditional
Broadcast out to the masses — you talk, they listen
📲 Social
Two-way and shareable — customers participate
Deeper dive · Retention
Keeping customers is cheaper than finding them
A repeat customer costs a fraction of a new one — and recruits friends for free.
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Rewards programs
Buy 9, get the 10th free — give loyalty a scoreboard.
🏷️
Special offers
Returning-customer discounts and early access — coming back feels VIP.
💌
Thank-you notes
A personal note in a world of bots is unreasonably powerful.
🙋
Personal assistance
A human who knows your order — service worth staying for.
🤖
Automated services
Reminders, reorders, tracking updates — touches that run themselves.
🏕️
Communities
Discords, run clubs, fan groups — customers who know each other stay.
The Marketing Plan · Scoreboard
If you can't measure it, you can't manage it
Key metrics = the numbers a business measures to tell whether it's succeeding.
🔁
Retention %
Share of customers who come back
👀
Post views
Is anyone seeing your content?
🛍️
Purchases
The number that pays rent
📲
App downloads
Installed = interested (not yet sold)
🕳️
Churn rate
The percentage of customers who stop using your product or service in a given period. The leak in the bucket — retention's evil twin.
💹
ROI — return on investment
The ratio of net profit to the cost of the investment. Spent $100 on flyers, earned $300 profit from them? ROI = 3× — do THAT again.
Your assignment · Breakout 4
Three goals, one funnel — this is your marketing plan
Your team needs 3 marketing goals — one per funnel stage — each with a promotional channel and the key metrics that prove it worked.
📢
1 · Awareness
Attention → Interest. They discover you exist and lean in. Channel: where they'll first see you · Metrics: views, followers, reach
💳
2 · Purchase
Desire → Action. They want it — and they buy it. Channel: where the sale happens · Metrics: purchases, conversion, ROI
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3 · Retention
Satisfaction. They come back and bring friends. Channel: your retention strategy · Metrics: retention %, churn, repeat purchases
Every goal: SMART. Every channel: where your persona actually is. Build it in Breakout 4 — workbook marketing plan section.
Your mission
What happens next
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Breakout 2
Competitive analysis + SWOT for your business — workbook p. 9. Name real competitors, direct and indirect.
💎
Breakout 3
Your UVP + target market: the one-line value proposition and the persona with real numbers behind it.
🎤
TA Workshop
Presentations — how to actually deliver this on stage Friday. Your hook, your structure, your close.
Bar for tonight: leave Breakout 2 able to finish this sentence — “Unlike [competitor], we [your edge].”
One thing to remember
Ideas are common. Edges are built.
Nobody wins Friday for having an idea. Teams win for proving why theirs beats the alternatives. Go build the proof.
🎤 Danny's story — to fill in
Close the loop on the cold open — how the competitive fight from slide 2 actually ended, and which "move" from today won it.
Tag the ending to one concept: the differentiator, the value prop, or knowing the customer better than the rival did